Libel success fees could be cut by 90%

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Justice Secretary Jack Straw has outlined proposals today that could see libel cost dramatically reduced with the limits on success fees charged by lawyers in “no win, no fee” cases cut by 90 per cent.

Straw announced a month-long consultation on tackling the “unjustified” success fees charged by lawyers, after which the changes outlined today could be enacted by Parliament under an “affirmative order” which would need to be debated in both Houses of Parliament.

The current law allows lawyers to double their fees under conditional fee agreements by claiming a success fee of up to 100 per cent on top of their usual fee, Straw said today that should be reduced to just 10 per cent.

A Ministry of Justice spokesman told Press Gazette that, depending on other parliamentary business, the changes could be made by the end of April and so before a possible general election in early May.

The MoJ said in a statement: “The proposal aims to prevent court costs in defamation cases spiralling out of control, deterring journalists and writers from publishing articles which are in the public interest, or forcing them to settle rather than defend defamation actions.”

Justice Secretary Jack Straw said: “Freedom of expression and investigative journalism are fundamental protections to the democracy of this country. I have recently announced a review of the law of libel, with a working group to consider whether the law of libel, including the law relating to libel tourism, in England and Wales needs reform, and if so to make recommendations as to solutions.

“I am, however, aware of the growing concern about the high legal costs in defamation and some other publication cases brought under conditional fee agreements (CFAs).

“Lawyers need to recover their costs and be rewarded for their efforts and the risks they undertake when providing people with access to justice in ‘no win no fee’ cases. But evidence suggests that the regular doubling of fees that currently takes place is simply not justified and the balance of costs between claimant and defendant needs to be reconsidered.”

The announcement follows Sir Rupert Jackson’s review of costs in the civil courts which suggested last week that success fees in libel and privacy cases should be scrapped altogether. This would require primary legislation, so won’t happen before the election.

Straw said he welcomed the Jackson report, adding “I look forward to considering the proposals in detail”, but he also said: “The case for an urgent interim measure for dealing with success fees in defamation cases has become clear; that is why I am publishing this important consultation paper today.”

This follows earlier changes to the libel rules announced by the MoJ in October which included creating a 42-day cooling-off period before claimants could start charging publishers for the cost of taking out After the Event insurance.

Press Gazette has been highlighting the injustices of the Conditonal Fee Agreement system for the last two years with its Fair Play on CFA campaign.